- MTS and Comstar Extraordinary General Meetings (EGMs) Expected to be
Convened on December 23, 2010 for Shareholders to Vote on the Proposed Merger

- Comstar Board Approval and Recommendation of the Transaction is Based
on the Recommendation of a Comstar Special Committee of Independent Board
Directors

- In Connection With the Merger and Subject to Review by the Federal
Service for Financial Markets (FSFM), MTS Will Launch a Voluntary Tender
Offer (VTO) for up to 37,614,678 Comstar Ordinary Shares (Including Shares
Underlying Comstar GDRs), Representing 9.0% of the Issued Share Capital of
Comstar, at RUR 220.0 Per Share

- Implied VTO Price Per Comstar GDR of USD 7.16(2) Represents a 13.1%
Premium to the Three Month Volume Weighted Average Trading Price of the
Comstar GDR

- VTO Documentation to be Disclosed and Posted to Comstar Shareholders
Following FSFM Review

The Boards of Directors of Mobile TeleSystems OJSC ("MTS" - NYSE: MBT),
the leading telecommunications provider in Russia and the CIS, and COMSTAR -
United TeleSystems JSC ("Comstar" - LSE: CMST), a leading supplier of
integrated telecommunication solutions in Russia and the CIS, announce that
they have approved and recommend the merger of MTS and Comstar. MTS currently
owns 61.97% of Comstar (64.03% excluding treasury shares) and consolidates
Comstar in its financial results. As a result of the statutory merger
("prisoedinenie" under Russian law), Comstar will be subsumed into MTS and
will cease to exist as a separate legal entity.

The Boards believe that the full consolidation of Comstar into MTS is
strategically important for both companies. A statutory merger is intended to
facilitate the full integration of MTS's and Comstar's subscriber bases and
enable the cross-selling and bundling of broadband and television services to
MTS's customers. As a result, the merger is expected to create additional
synergies and cost savings across the combined entity and strengthen its
competitive position. MTS is on track to exceed the USD 200 million of cost
synergies indicated when it purchased majority control of Comstar in October
2009.

According to the merger terms agreed between the MTS and Comstar Boards,
eligible Comstar shareholders will receive 0.825 MTS ordinary shares for each
Comstar ordinary share that they own (with one Comstar GDR representing one
ordinary share)(3). The exchange ratio represents a 7.7% premium to the three
month volume weighted average exchange ratio between MTS ordinary shares and
Comstar GDRs. The merger is conditional on the approval of 75% of the
shareholders present at each company's EGM, the receipt of regulatory
clearance and other closing conditions. MTS and Comstar expect to convene
EGMs on December 23, 2010, at which their respective shareholders will vote
on the merger. As required by Russian Joint Stock Companies Law, MTS and
Comstar shareholders who vote against or do not vote on the merger will have
the right to sell their shares back to MTS and Comstar, respectively, for
cash at a price set by the respective companies' Boards of Directors, subject
to the statutory limit of 10% of each company's Net Asset Value under Russian
Accounting Standards as determined at the most recent reporting date
preceding each company's EGM(4). Taking into account the independent
statutory appraisals carried out separately by Ernst & Young for MTS and
Comstar, the Board of Directors of MTS has set the repurchase price at RUR
245.19 per MTS ordinary share, while the Comstar Board of Directors has set
its repurchase price at RUR 212.85 per Comstar ordinary share. MTS and
Comstar shareholders wishing to sell their shares back to the respective
companies will be able to sell their shares pro rata in the event of
over-subscription. The companies expect to complete the merger transaction in
the second quarter of 2011.

(1) Up to June 22, 2010.

(2) All US dollar amounts presented in this press release are based on
the RUR/USD exchange rate of RUR 30.7267 per USD 1 as of June 22, 2010.

(3) Holders of Comstar GDRs who do not wish or are not permitted under
their local law to receive MTS shares in connection with the merger will
receive the cash proceeds from the sale of the MTS shares to which they would
have been entitled net of applicable fees, expenses and taxes, and subject to
any adjustment for currency exchange rate fluctuations.

(4) For illustrative purposes only and based on the MTS and Comstar RAS
financial statements for the first quarter of 2010 and the respective
repurchase prices set by the two companies, MTS shareholders would be able to
sell back up to 2.4% of MTS's total shares outstanding, and Comstar
shareholders would be able to sell back up to 6.1% of Comstar's total shares
outstanding.

MTS will also launch a parallel voluntary tender offer (VTO) for up to
37,614,678 Comstar shares, representing 9.0% of the issued share capital of
Comstar, at RUR 220.0 per Comstar ordinary share. The implied VTO price per
GDR is equivalent to USD 7.16, which represents a 13.1% premium to the three
month volume weighted average trading price of the Comstar GDR on the London
Stock Exchange. The VTO documentation has been submitted for review to the
FSFM and, following this review, the offer will be made by delivery of the
VTO documentation to the Comstar Board of Directors. The Comstar Board will
thereafter deliver the VTO documentation to Comstar ordinary shareholders and
to Comstar GDR holders via Deutsche Bank (the depositary bank for Comstar's
GDR facility). Comstar shareholders subscribing to the VTO will receive a pro
rata cash allocation in the event of over-subscription to the VTO.

The combined merger and voluntary tender offer structure, together with
the statutory right of shareholders to sell their shares back to MTS and
Comstar, is intended to facilitate a cash and stock transaction, whereby the
companies can be combined after completion of the merger. In the event of
full election of the cash alternatives, through the VTO and the sale of
shares back to Comstar, the implied transaction value could be up to USD
1,030 million.

Mikhail Shamolin, President and Chief Executive Officer of MTS,
commented: "We believe that the merger of MTS and Comstar is attractive for
our shareholders because it will accelerate the delivery of our "3i"
strategic goal of realizing growth through increasing customer value, by
providing our customers with a broad, innovative and integrated offering of
mobile and fixed line telephony, high-speed internet access and pay-TV
services. The merger will enable the full integration of the Comstar and MTS
customer bases and the provision of bundled service offerings across Russia,
which we believe will further enhance our combined competitive position. In
particular, the merger is expected to streamline common business processes
and further optimize operating and capital expenditure. The structure of the
merger provides a mix of stock and cash alternatives for Comstar minority
shareholders, and also enables MTS to retain the financial resources and
flexibility to invest in the combined Group moving forward in key areas such
as broadband network development and 3G deployment."

Thomas Holtrop, Chairman of the Comstar Special Committee of Independent
Board Directors, commented: "The Special Committee of Independent Board
Directors has negotiated the terms of the transaction with MTS and
recommended that the Board of Comstar vote to approve the merger terms and
the transaction as a whole. We believe that the transaction presents Comstar
minority shareholders with attractive alternatives, as it will enable them to
participate in the future upside potential of the combined entity by
accepting shares in MTS or, alternatively, to receive cash by exercising
their statutory right to sell their shares back to the company. We look
forward to receiving and considering the voluntary tender offer in the coming
weeks."

Goldman Sachs International is acting as financial advisor to MTS. J.P.
Morgan plc provided a fairness opinion to the Comstar Special Committee of
Independent Board Directors. Latham & Watkins LLP is acting as legal advisor
to MTS, and Linklaters CIS is acting as legal advisor to Comstar. Ernst &
Young provided independent statutory appraisals to MTS and the Comstar
Special Committee of Independent Board Directors for the purposes of each
company's assessment of the prices to be paid in relation to the statutory
right of shareholders to sell their shares back to each respective company.

MTS and Comstar will host a joint conference call today, which will start
at:

18:00 hrs (Moscow time)

15:00 hrs (London time)

10:00 hrs (US Eastern time)

To take part in the conference call, please dial one of the following
telephone numbers, quoting the MTS and Comstar call:

From Russia: +7-495-545-0587 PIN: 3444521#

From the US: +1-718-354-1152 PIN: 3444521#

From the UK: +44-203-140-8286 PIN: 3444521#

A replay of the conference call will be available from approximately
22:00 Moscow time / 19:00 London time / 14:00 US Eastern time today until
July 1, 2010:

From Russia: 810-800-2870-1012 PIN: 3444521#

From the US: +1-347-366-9565 PIN: 3444521#

From the UK: +44-207-111-1244 PIN: 3444521#

A slide presentation has also been posted at
http://www.mtsgsm.com/news/2010-06-25-28131/ and
http://www.comstar-uts.ru/common/img/uploaded/100625_Proposed
Merger_Presentation.ppt

Important Information

This document is not for release, publication or distribution, in whole
or in part, in, into or from any jurisdiction where to do so would constitute
a violation of the relevant laws of that jurisdiction.

This document is for informational purposes and shall not constitute an
offer to purchase or a solicitation of an offer to purchase with respect to
any securities. Any such offer or solicitation will be made only by means of
the offer document delivered to Comstar in respect of the VTO.

The final terms of the VTO will be contained in the offer document
delivered to Comstar. Investors and shareholders of Comstar are strongly
advised to read the offer document and related materials as soon as they have
been published, as these will contain important information.

The VTO will be made for the securities of Comstar, a company
incorporated under the laws of Russia and will be made in the United States
in compliance with Section 14(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Regulation 14E thereunder. The VTO will be
made in the United States by MTS and no one else. The VTO will be subject to
disclosure and procedure requirements of Russia which are different from
those of the United States.

MTS, certain affiliated companies and the nominees or brokers (acting as
agents) may make certain purchases of, or arrangements to purchase, shares in
Comstar outside the VTO during the period in which the VTO remains open for
acceptance. If such purchases or arrangements to purchase are made they will
be made outside the United States and will comply with applicable law,
including the Exchange Act.

This document is not an offer for sale of any securities in the United
States. Securities may not be offered or sold in the United States absent
registration or an exemption from registration under the U.S. Securities Act
of 1933, as amended (the "Securities Act"). MTS does not intend to register
securities or conduct a public offering in the United States.

No action has been or will be taken in any jurisdiction that would permit
a public or registered offering to acquire MTS shares in exchange for the
shares of Comstar in connection with the Merger. Therefore, only those
Comstar shareholders (including holders of global depositary receipts) who
are resident in a jurisdiction which permits those shareholders to
participate in a non-public, or unregistered, private offering of securities
will be eligible to receive MTS shares in connection with the merger. Holders
of Comstar GDRs who are not eligible to receive MTS shares in connection with
the merger will receive the cash proceeds from the sale of the MTS shares to
which they would have been entitled net of applicable fees, expenses and
taxes and subject to any adjustment for currency exchange rate fluctuations.

This communication is being distributed to and is directed only at (i)
persons who are outside the United Kingdom or (ii) persons who have
professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") and (iii) high net worth entities, and
other persons to whom it may lawfully be communicated, falling within Article
49 of the Order (all such persons together being referred to as "relevant
persons"). Any investment activity to which this communication relates will
only be available to and will only be engaged with, relevant persons. Any
person who is not a relevant person should not act or rely on this document
or any of its contents.

Persons who are resident in the United Kingdom should note that the VTO,
when made, will be to, and acceptance will be accepted from, only those
investors and shareholders in the United Kingdom who are (or who are acting
on behalf of), and who are able to establish to the satisfaction of MTS that
they are (or are acting on behalf of): "qualified investors" within the
meaning of section 86(7) of the Financial Services and Markets Act 2000, or
(ii) persons to whom the VTO may otherwise be made or directed without an
approved prospectus having first been made available to the public in the
United Kingdom. United Kingdom investors and shareholders receiving the VTO
should consult with their legal advisers to determine whether they are
eligible as "qualified investors" or are otherwise able to receive and accept
the VTO.

The release, publication or distribution of this document and any other
applicable VTO- or merger-related documentation may be affected by the laws
or regulations of relevant jurisdictions. Therefore, any persons who are
subject to the laws and regulations of any jurisdiction should inform
themselves of and observe any applicable requirements.

J.P. Morgan plc ("J.P. Morgan") is acting for Comstar (as represented by
the Special Committee) in relation to the Transaction and for no one else and
J.P. Morgan shall not regard any other person (including, without limitation,
any person who is a director, officer, employee, shareholder or creditor of
Comstar) as its client in relation to the Transaction and shall not be
responsible to any other person for providing protections afforded to clients
of J.P. Morgan or advising any other person involved in the Transaction.

Some of the information in this press release may contain projections or
other forward-looking statements regarding future events or the future
financial performance of MTS and/or Comstar. You can identify forward looking
statements by terms such as "expect," "believe," "anticipate," "estimate,"
"intend," "will," "could," "may" or "might," and the negative of such terms
or other similar expressions. In addition, statements regarding expected
operational and cost synergies in respect of the merger of MTS and Comstar
are forward-looking statements. MTS and Comstar wish to caution you that
these statements are only predictions and that actual events or results may
differ materially. MTS and Comstar do not intend to update these statements
to reflect events and circumstances occurring after the date hereof or to
reflect the occurrence of unanticipated events. MTS and Comstar refer you to
the documents MTS files from time to time with the U.S. Securities and
Exchange Commission, specifically the MTS's most recent Form 20-F. These
documents contain and identify important factors, including those contained
in the section captioned "Risk Factors" that could cause the actual results
to differ materially from those contained in MTS's and Comstar's projections
or forward-looking statements, including, among others, potential
fluctuations in quarterly results, MTS's and Comstar's competitive
environment, dependence on new service development and tariff structures,
rapid technological and market change, acquisition strategy, risks associated
with telecommunications infrastructure, risks associated with operating in
Russia and the CIS, volatility of stock price, financial risk management and
future growth subject to risks.

Mobile TeleSystems OJSC ("MTS") is the leading telecommunications group
in Russia, Eastern Europe and Central Asia, offering mobile and fixed voice,
broadband, pay TV as well as content and entertainment services in one of the
world's fastest growing regions. Including its subsidiaries, the Group
services over 103.5 million mobile subscribers in Russia, Ukraine,
Uzbekistan, Turkmenistan, Armenia and Belarus, a region that boasts a total
population of more than 230 million. Since June 2000, MTS's Level 3 ADRs have
been listed on the New York Stock Exchange (ticker symbol MBT). Additional
information about the MTS Group can be found at http://www.mtsgsm.com.

Comstar-UTS ("Comstar") is the leading fixed-line telecommunications
company in Moscow. Comstar provides voice, data, television and other
value-added services to residential and corporate subscribers and operators,
using its extensive backbone network and exclusive last mile access to 96% of
Moscow households. The Company also offers communications services in 82
cities in the Russian regions, Armenia and Ukraine. Comstar had 3.6 million
residential subscribers including 860 thousand residential broadband internet
subscribers in Moscow, as well as 2.6 million regional and international
residential subscribers, including 426 thousand residential broadband
internet subscribers and 2.0 million residential pay-TV subscribers at the
end of the first quarter of 2010. Comstar generated USD 407.0 million of
revenues and an 43.9% OIBDA margin for the three months ended March 31, 2010.
Comstar's Global Depositary Receipts are listed on the London Stock Exchange
(ticker: CMST).